The paper models strategic monetary-fiscal interactions in the aftermath of the global financial crisis - in a single country as well as a monetary union. It depicts both the short- term (stabilization) perspective and the long-term (sustainability) perspective, and the link between them. This...

The paper models strategic monetary-fiscal interactions in the aftermath of the global financial crisis - in a single country as well as a monetary union. It depicts both the short- term (stabilization) perspective and the long-term (sustainability) perspective, and the link between them. This...

The aftermath of the Global financial crisis has seen two types of monetary policy concerns. Some economists (e.g. Paul Krugman) worry primarily about possible deflation caused by a secular stagnation. In contrast, others (e.g. John Taylor) worry about excessively high inflation caused by...

From a methodological point of view, standard neo-Keynesian IS - LM analysis of the macroeconomic effects of fiscal policies is rather problematic. The reason is that this analysis is fundamentally static and lacks microeconomic foundations. Moreover, this analysis focuses too heavily on the...

This paper is focused on the neoclassical approach in economics and its fundamentals as they are coming from the philosophy of science. However, the author does not want to be treated as an advocate of this approach; this paper is an attempt to popularize several relevant features of...

This paper proposes a simple framework that generalizes the timing structure of macroeconomic (as well as other) games. Building on alternative move games and models of "rational inattention" the players' actions may be rigid, ie optimally chosen to be infrequent. This rigidity makes the game...

Opponents of inflation targeting have argued that a commitment to a numerical inflation target reduces policy's stabilization flexibility - increasing output volatility under supply shocks. Using a novel game theoretic approach our paper demonstrates that this claim may fail to account for the...

Monetary and fiscal policies interact in many ways. Recently, the stance of fiscal policy in a number of countries (including the EU and the US) has raised concerns about risks for the outcomes of monetary policy. Our paper first shows that these concerns are justified since - under an ambitious...

This paper generalizes and qualifies an influential monetary policy result due to Rogoff (1985) by taking fiscal policy, and fiscal-monetary interactions, into account. It shows that an appointment of a conservative central banker may, under a range of circum- stances, (i) increase the average...

Assessing the effect of the timing and sequencing of various policy regimes on optimizing agent behavior is both important and difficult. To offer some insights, this article examines a timing decision from sports. The penalty shootout in football (soccer) has long been seen as problematic,...